By Ann Duwe
RHNA stands for Regional Housing Needs Assessment and refers to the number of housing units, at various price points, each city must add within an eight-year period. California cities are now in their sixth RHNA cycle. While the argument can be made that cities have failed to create conditions for making housing affordable, one must remember that cities don’t build housing or control the factors that have put housing out of reach for many Californians. Now, instead of partnering with cities to address the needs of middle- and low-income residents, Governor Newsom, the state legislature and HCD (Department of Housing and Community Development) have weaponized the sixth-cycle RHNA numbers by increasing them to unattainable heights. Failure to meet the RHNA numbers removes decision-making from the hands of local elected officials and gives it to developers.
Michael Barnes, former Albany city councilman and one of several economic analysts familiar with the numbers, says people who worked through the fourth and fifth cycles found the process relatively benign, in spite of being needlessly bureaucratic. According to Barnes, the sixth cycle has been very different.
“I suspect problems with the sixth cycle emerged when Gavin Newsom was campaigning for governor and declared he would build 3.5 million homes. He later dropped the number to 2.5 million, without explanation. To save face, Newsom found a compliant HCD director in Gustavo Velasquez and ordered him to backfill the RHNA numbers to hit the 2.5 million target.”
And backfill they did. The numbers themselves have thus been detached from facts such as the size and makeup of the state’s population, the likelihood of population growth or decline, the number of vacant units, the rate of household formation, etc. The sixth-cycle RHNA numbers are so high most cities will fail to reach them.
Failure to reach those inflated numbers means that decisions formerly made by local residents through their planning commissions and city councils will now be made by developers and deep-pocketed real estate investment companies. This transfer of power has been aided by the torrent of state legislation that limits such things as environmental protections cities might invoke or fees cities might charge to help pay for new infrastructure.
While Newsom and the state legislature claim this turn of events is necessary to address the “housing crisis,” the fact is the RHNA system, in effect for 52 years, leads to large amounts of new market-rate and luxury housing, and a miniscule number of units affordable to middle and low-income residents.
Studies suggest California has a reasonable supply of market-rate and luxury housing, largely regulated by supply and demand. Building and maintaining housing for other demographics requires a totally different approach. What’s needed is a large fund devoted to providing that housing. Money should be awarded to projects on the basis of their ability to serve middle- to low-income residents and to satisfy the specific needs of their locations. Palo Alto doesn’t need farm worker housing, and Pescadero doesn’t need a large number of restaurant workers. All cities need to focus on what they can do to overcome the genuine causes of the affordability crisis – income inequality, rising costs for building materials, limited supply of skilled workers to build new housing, houses and apartments deliberately kept empty for investment purposes.
When questioned about the sixth-cycle numbers, Governor Newsom and the legislature beefed up enforcement. Fear of very harsh consequences forces cities into submission, regardless of the bogus numbers.
It is time to abandon the RHNA system and restore decisions about the character of communities to the people who live there. Housing within reach of a much larger segment of our population must be at the center of our collective effort, not tacked on as a by-product of large, dense profitable projects.
Duwe is a Los Altos Hills resident.
